While alert shared by Arkham could have caused some confusion among retail traders, it was not reason behind plunge
A recent market plunge has left investors searching for answers, and a professional trader has shared some intriguing insights on what may have contributed to the sudden drop. Contrary to popular belief, Arkham’s false alert might not have played a significant role in the market’s plummet.
The trader highlights a series of events that unfolded on the day of the plunge: A $150 million spot bid led to a $1.5 billion derivatives bid, pushing Bitcoin’s price up to $30,000. This significant spot bid started at around 3 a.m. UTC and was led by prominent exchanges such as Binance and Coinbase.
thiccy’s thots on btc pa today:
– 150mm spot bid caused 1.5b derivs bid
– tradfi funds probs not bidding spot
– dollar + gold are flat, unlike in March
– toppled later in day when spot bid stopped
– arkham false alert likely no effect on PA
– patient bulls bought dip after pic.twitter.com/BsoXi1U1Sh— Alex (@thiccythot_) April 27, 2023
The derivatives bid was likely triggered by fast money watching for spot bids, similar to the situation in March involving SVB.
After the momentum stalled, market participants scrambled to exit their positions, resulting in a massive hourly red candle. Interestingly, the erroneous Arkham alert coincided with the market’s bottom. Patient bulls bought the dip after the leverage was wiped out, pushing the price back up to $29,000.
The trader also speculates on the potential involvement of traditional finance (TradFi) funds in the market plunge. They argue that if these funds had played a significant role, gold and the U.S. dollar would have reacted differently. However, gold barely moved, and the U.S. dollar remained flat during the market plunge.
As for who was responsible for the buying activity, the trader admits they are uncertain. There are various theories circulating, including hunting shorts and potential positive narratives involving Binance and the CFTC. Regardless of the reasons behind the buying, the event revealed the market’s vulnerability to rapid price fluctuations.
Source: https://u.today/professional-trader-shows-what-really-caused-crypto-market-plunge-and-its-not-arkham